News Translation Ledger — Reading "Cash is Disappearing" from the Denominator

When to use　The day you saw figures on payment ratios or "cash decline" in the newspaper or on TV.

Headline

"Cashless Payment Ratio 58%," "Decline of Cash Accelerates." Headlines feature a single number. Without looking at the denominator of that number, you cannot know what has decreased.

The content of the number

The Ministry of Economy, Trade and Industry announced the cashless payment ratio for 2025 as 58.0% (162.7 trillion yen). This is a ratio by value, with the denominator being domestic consumption expenditure. The previous year, 2024, was 42.8% (141.0 trillion yen). It appears to have risen by 15 percentage points in one year, but from 2025, it changed to a "domestic indicator," and imputed rent for owner-occupied housing, among other things, has been excluded from the denominator. The ministry notes that based on 2020-2024 data, the domestic indicator is 8-9 percentage points higher. If you are to compare two years, you should use the same indicator.

Number of transactions and value

Even for "non-cash," the picture differs between value and number of transactions. In 2025, the breakdown of the numerator by value is: credit cards 82.7%, code payments 10.2%, and e-money 3.7%. In the Eurozone, the European Central Bank counts by number of transactions. In 2024, cash accounted for 52% of point-of-sale payments by number of transactions and 39% by value. By number of transactions, cash is the most common method, while by value, cards are higher at 45%.

Remaining cash

The decrease in cash usage and the amount of cash remaining in circulation are measured by different figures. The Bank of Japan wrote in its 2020 policy that Japan's currency in circulation is high, at about 20% of nominal GDP. The banknotes in circulation at the end of 2025 amounted to 120.6 trillion yen, or 18.32 billion notes. A decrease in the share of cash in payments and a decrease in the amount of cash in circulation are two different events.

In your own case

How many of your payments in a week were in cash, and what was the total value of those cash payments? Counting by both number of transactions and value shows whether the figures in the article apply to you.

Procedure

1. Look for the denominatorIs it consumption expenditure, the number of point-of-sale payments, or the amount of cash in circulation?
2. Number of transactions or value?Cash tends to be higher by number of transactions, cards by value.
3. Was it a year the metric changed?In a year when an indicator's definition changed, do not compare it with the previous year.
4. Also look at the remaining amountThe usage ratio and the amount in circulation are different figures.

In other countries

In the Eurozone, cash was the most frequent means of payment at the point of sale by number of transactions in 14 out of 20 countries in 2024. For people aged 65 and over, cash accounted for 57%. The fact that the same "decrease" can look different depending on how it is counted is true regardless of the country.

Source (Archive)

• The Cashless Payment Ratio for 2025 Has Been CalculatedMinistry of Economy, Trade and Industry
• The Cashless Payment Ratio for 2024 Has Been CalculatedMinistry of Economy, Trade and Industry
• Study on the payment attitudes of consumers in the euro area (SPACE) – 2024European Central Bank
• The Bank of Japan's Approach to Central Bank Digital CurrencyBank of Japan
• How many banknotes move in and out of the Bank of Japan? Also, what is the total value of banknotes circulating in Japan?Bank of Japan (Tell me! Nichigin)

Related Subjects and Practical Skills

P7　P2　Five questions before using a new payment method — Whose liability? Ledger? Pay now or later? Reversibility? Contact for issues?